David Cameron, his coalition Government and the various Government Development Agencies are all encouraging, if not pushing, UK businesses to export more to achieve the growth required and close the gap in the Balance of Payments.
So! How do you succeed in international business? Here are some of the things that I’ve learned having been responsible for leading, establishing, acquiring, selling and undertaking business in the following thirty plus countries worldwide over the last 27 years:
- North America (Canada and USA)
- South America (Brazil & Venezuela)
- Europe (Norway, Denmark, Holland, France & Spain)
- FSU (Russia, Sakhalin, Azerbaijan, Kazakhstan, Georgia)
- Middle East (UAE, Saudi Arabia, Oman, Kuwait, Iran)
- India, Africa (Egypt, Libya, Algeria, Nigeria, Sudan and Yemen)
- Far East (Malaysia, Singapore, Indonesia, China, Japan)
FIRSTLY ASK YOURSELF WHY & UNDERSTAND THE RISKs
Before you set out to internationalise your business, you first need to ask yourself Why and understand the risks involved. Internationalisation is normally higher risk, more costly & much harder than finding more clients and business in existing markets / nearer to home. However, if you’re determined that it’s the right thing to do then below are some of the things that you need to think about.
INTERNAL HEALTH CHECK
Before embarking on any overseas / international expansion you must first undertake an internal health check! You should check things such as:
- Are you (as the leader) personally fit to undertake overseas travel and sustain the hectic schedule?
- Is you business fit?
- Do you have the right & competent resources to undertake the international business development?
- Are your processes & systems suitable, scaleable & accessible remotely?
- Do you have resources to backfill and / or cover?
- Do you have a plan?
- Is your brand fit? Will it internationalise and / or transend numerous cultures?
- Do you have sufficient funding to sustain your internationalisation plans?
- Do you, or any of your team, have any knowledge or experience or doing business internationally?
If the answer to only a few of these basics is No, then I urge you to stop and seek advice and help first. It could be a costly mistake if you get it wrong including losing your business! I’ve seen it happen!
FOCUS ON A FEW MARKETS
You should focus on a few markets, rather than a scattergun approach! You need to develop a clear criteria for the markets that you will / are able to penetrate and do the necessary analysis. Perhaps use the SE / Dti "Country Scorecard" tool.
RESEARCH, RESEARCH, RESEARCH
Before you consider setting off in any particular direction you first need to undertake extensive research. Check out the SDi, FCO, SE, World Bank websites amongst others to learn about the countries, the business culture, how to do business and useful contacts
STAMINA & COMMITMENT
Be aware that an incredible amount of stamina and commitment are required! You need to keep going forward and not give up when you meet with problems or suffer any setbacks. I can assure you, you will!
IT WILL TAKE LONGER AND COST MORE THAN YOU THINK
Beware! It always takes much longer and costs much more than you originally think. Whatever the number you first think of, triple it and you might be nearer the final number required! So you’ll need to ensure you’ve got sufficient cash funds available to finance this just like any other investment. You also need to be realistic in setting your plans. Don’t try to ‘bite off the elephant all in one go’!
PRODUCT OR SERVICE FIT
Make sure your products and services fit the target market and / or taylor your product or service to suit the individual market needs. 'One size suits all approach' does not work. You must do your research!
THE POLITICS, VALUES & WAYS OF DOING BUSINESS
You need to be very aware of the politics, values and ways of doing business of the differing nations and cultures / religions. Ignore these at your peril. Also, be aware of the local mafia (literally at times)!
Make sure you are fully conversant with local business structures, laws, labour practices plus taxation and money transaction rules / laws.
LANGUAGE & EMOTIONS
Watch out for language challenges! Just because they speak english, doesn’t mean they understand us, like us, or are open to do business with us! Equally, it doesn’t mean that they do business in the same way! You also need to learn to keep your emotions in check. Some nationalities and / or cultures watch your body language and deliberately provoke you to elicit a response and test you!
PERHAPS USE A PARTNER
In the first instance, it is sometimes easier to find & use a partner that is local or has done business successfully there for many years! However, finding the right one can be a challenge in itself! Beware, there are many rouge companies out there that feed off newbies who don’t know any better! Improve your odds and use the UK DTi, SDi and GlobalScot networks for advice and local introductions. There are often grants available too!
THINK GLOBAL BUT ACT LOCAL
From my experience you will only finally make some traction and get some successes if you have a local presence, even if it's virtual. It’s essential that you develop local marketing materials including the local language and don’t just issue corporate english marketing materials. Everyone prefers to do business with local people, including us!
ENSURE YOU PLAN FOR SUCCESS
You should always develop a plan because as they say, “if you fail to plan, you plan to fail!”. Or as the SAS would say, “Proper Preparation & Planning, Prevents Piss Poor Performance” (The 7P's).
FINANCIAL RISKS & OTHER RELATED CONCERNS
- Getting paid in reasonable time or at all, can be a challenge
- Watch out for currency exchange fluctuations
- Make sure you control your travel policy and costs. Costs can mount up. It's not a holiday! Consider & use alternatives. Use experienced travel agents.
- Don’t forget to ensure you’re fully covered with insurances including, in some cases, Kidnap and Ransom insurance.
A SUGGESTED LOW RISK STRATEGY!
I believe that the best (lowest risk) internationalisation strategy is to follow your existing clients, partners and / or do business with people you know and trust. Even then things don’t always work out! Going on a DTi, SDi or SCDI Trade Mission can sometimes be a safe first step.
If you’d like to understand more or want some help with preparing or executing your internationalisation strategy and plans, then please contact me for a free and confidential initial conversation.
Murray works with executives, funders and shareholders to recover & create value! You can contact Murray via his website www.murraystrachan.co.uk or follow him on twitter @murraystrachan